Alto Real Estate, a private equity real estate firm, is bolstering its US operations with a key new hire.
Alto, which has offices in Tel Aviv, New York and Dallas, primarily invests in US coastal and Sunbelt cities with significant job growth. To spur more investments, the firm has hired Scott Onufrey as managing partner in a new role that includes fundraising oversight and leading the acquisitions and dispositions team. Onufrey, who joined the firm’s two-person New York office three weeks ago, said he will hire at least two more employees. The new executive came from 17 years at Kimco Realty, a New York-based real estate investment trust.
Alto, founded in 2010, has about $1 billion of assets under management, according to a spokeswoman. To fund its expansion, Alto launched its third value-add fund earlier this month with a $300 million target. The firm closed ALTO II at $138 million in September, and has $25 million of capital left to deploy. Capital for the second fund came from Israeli institutional investors, with $20 million of co-investment from the firm. For ALTO III, which is domiciled in the US, Onufrey plans to use his relationships with US and international institutional investors to broaden Alto’s investor base, aided by placement agents to identify family offices, endowments and foundations that might also invest in the vehicle.
Onufrey said his goals for his first year on the job include holding closings for the third fund, with a targeted first close in May, and acquiring $100 million worth of properties. Alto works with local operating partners to buy and reposition assets, with a net internal rate of return goal in the low to mid-teens. Onufrey said the firm’s small size is an advantage for multiple stakeholders compared with its bigger industry counterparts.
“Larger organizations, including some of the larger investment managers, have a lot of hoops to jump through,” he told PERE. “We can make decisions quickly and very often, time is money. [Speed] benefits investors and local operating partners.”
To date, the firm has invested in 52 properties and has sold 14 assets with an average net internal rate of return of 30 percent, according to a statement. In October, Alto announced it bought a 24-property portfolio for $224 million with Northstar Commercial Partners using capital from ALTO II. The value-add portfolio included industrial properties, office buildings and retail assets.